Health Systems Transformation director says American Health Care Act reduces health insurance access and creates Medicaid funding challenges

March 07, 2017

Millions of Americans will lose health insurance, and state Medicaid programs – particularly in states that expanded coverage – are likely to face budget challenges under the American Health Care Act (AHCA) released March 6 by House Republicans, said UMass Medical School health care expert Terry Dougherty, MPH.

The health care plan introduced by Republicans would replace the 2010 Affordable Care Act (ACA), commonly referred to as Obamacare, which is credited with drastically reducing the uninsurance rate in the United States.

“The Affordable Care Act was really about promoting access to insurance and getting everybody possible in the United States covered by an insurance plan. As the new plan looks right now it’s really not about getting everybody covered, it’s about getting some people covered, so clearly there will be curtailing of the number of Americans who are covered under this act,” said Dougherty, executive director for Health Systems Transformation at UMass Medical School’s Commonwealth Medicine division. Dougherty previously served as director of the Massachusetts Medicaid program, MassHealth.

“A roll back of provisions that are included in the ACA that are aimed at the non-group market, or the single buyer market, and then the Medicaid combined could be anywhere from 6, 12, 15 million people of the 20 or so million people that gained coverage under the ACA,” he said.

The new plan would remove key features of the ACA, including a tax on those who do not buy health insurance and premium limits for older enrollees. The new act would also eliminate funding for Medicaid expansion programs starting in 2020, and begin to fund Medicaid through per capita caps.

“States that expanded their Medicaid programs under the Affordable Care Act will continue to be able to operate those expansion programs until the year 2020, at which time their finding stream – which right now consists of 90 percent money coming from the federal government – will revert back to whatever that state’s typical federal reimbursement is for their Medicaid program,” Dougherty said.

“In the case of Massachusetts, we’ll go from 90 percent reimbursement back to a 50 percent reimbursement,” Dougherty said. “That will have significant impacts on state budgets [if] we want to continue to ensure that everybody has access to health care and the Medicaid program is still running as generously as it is.”

Moving Medicaid funding to a per capita cap system will likely lead to difficult decisions around services provided to vulnerable populations, especially members with chronic medical conditions, Dougherty said.

“As we start to cap the amount of funds that are available to fund these populations, decisions are going to have to be made relative to what’s the benefit level, what services are available, an issue we usually refer to as type and duration,” he said. “Perhaps you don’t get as many physician visits or pharmacy prescriptions as you might have otherwise received.”

Medicaid experts at UMass Medical School are prepared to help states navigate their high-priority challenges by offering specialized services and expertise to contain costs and improve outcomes. We have offerings in the areas of:

  • Medicaid Consulting and Operations
  • Delivery System and Payment Reform
  • Managed Long-Term Services and Supports
  • Medicare Eligibility Enhancement

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